Assume that Bybee uses the units of production method when depreciating its equipment. Bybee estimates that the purchased equipment will produce 1,000,000 units over its 5-year useful life and has salvage value of $17,000. Bybee produced 265,000 units with the equipment by the end of the first year of purchase. Which amount below is closest to the amount Bybee will record for depreciation expense for the equipment in the first year?
A)$96,725
B)$62,600
C)$78,440
D)$82,945

Question

Quizplus · Accepted Answer

($313,000 cost of equipment (33% of $950,000 purchase price) minus $17,000 salvage value)/1,000,000 units = $0.296 per unit; $0.296 x 265,000 units = $78,440

Assume That Bybee Uses the Units of Production Method When